KARACHI (PR) – Leaders of the United Business Group (UBG), including Patron-in-Chief SM Tanveer, President Zubair Tufail, General Secretary (Sindh) Hanif Gohar, and Core Committee Member Syed Mazhar Ali Nasir, have highlighted the significant challenges faced by investors in Pakistan and called for robust government policies to ensure economic stability.
In a discussion with a delegation of businessmen and industrialists, UBG leaders outlined the obstacles impeding both foreign and domestic investment. They pointed to a lack of long-term policies, economic uncertainties, and an onerous tax regime as major deterrents. High utility tariffs, excessive taxes such as the super tax and taxes on dividends, have resulted in effective tax rates of up to 68 percent for shareholders, creating a burdensome environment for industries.
The absence of a clear industrial policy, combined with high energy tariffs and prolonged power and gas load shedding, has further exacerbated the economic challenges, leading to frustration within the business community. Additional issues like smuggling, under-invoicing, and misdeclaration of imports have compounded the difficulties, hindering industry growth.
Prospective investors are wary, noting the reluctance of current investors to reinvest in Pakistan’s economy. To address these issues, UBG leaders emphasized the need for technical support to resolve energy sector challenges, including the substantial circular debt and losses in gas and electricity transmission.
UBG urged the government to reduce import reliance, implement sustainable tax policies, and simplify fiscal regulations to foster wealth creation, job growth, and exports. They advocated for separating fiscal policy from tax collection to prevent short-term revenue-driven actions by tax authorities. Aligning fiscal policies with industrial, investment, and trade policies is crucial for creating a conducive growth environment, they stressed.
Moreover, UBG called for the gradual elimination of the super tax, which has significantly increased the corporate tax rate, and recommended reducing the general sales tax to incentivize retailers to join the tax net. They underscored the importance of raising the tax-to-GDP ratio to at least 15 percent by broadening the tax base and urged the government to address critical issues in the federal budget 2024-25 without overburdening existing taxpayers.
